Business/Consumer Services

Brink's shareholder urges sale of the company

SaabiraChaudhuri

A shareholder of Brink's Co.
BCO, -1.33%
has sent a letter to the company's board urging it to immediately consider strategic alternatives, including the sale of the company, citing a declining share price and poor corporate governance.

Shares of Brink's rose 6.3% to $27.85 in recent trading. The stock has climbed 24% in the past three months.

In a letter dated Friday, Shamrock Holdings Inc. President Stanley P. Gold noted that Brink's share price has declined by more than 60% in the past five years, and has "consistently lagged behind the stock price of its key competitors."

He said "Brink's shareholders have suffered through years of empty promises and failed initiatives" and that "unfortunately, we do not believe there is a realistic chance for improvement by continuing on the existing path with current management."

A representative of Brink's didn't immediately respond to a request for comment.

Mr. Gold referred to the elevation of board member Thomas Schievelbein from an interim chief executive and chairman position to the permanent CEO, calling the move "an inexplicable result that calls into question the effectiveness of the board's oversight over, and apparent lack of, succession planning and execution, all in contravention of the company's own corporate governance policies." He added: "Moreover, by declining to separate the CEO and chairman role, the board continued to demonstrate its arrogance in dismissing shareholder concerns regarding the board's poor corporate governance."

He said Brink's "would be an attractive acquisition target," noting that last month, Garda World Security Corp. (GWDAF) announced it will be acquired by a private equity company at a 30% premium.

"Applying the transaction metrics in the Garda transaction, Brink's would be valued at approximately $40 per share, or a 57% premium to the current stock price," said Mr. Gold. "Moreover, Brink's may be appealing to strategic acquirers who are looking to expand in the U.S. or buttress their operations in Europe or Latin America."

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